Construction Finance
Can You Refinance During Construction?
5 min read- Finance Guide
- Updated 2026
Quick answer
Yes, but it depends on
3 key factors
Current stage, remaining cost, and updated valuation
- Refinance complexity Higher than standard refinance
- Common trigger points Rate, cash flow, or policy changes
- Key risk Valuation or incomplete works
1300 421 044
1300 421 044
Detailed explanation
Refinancing during construction usually means moving an existing building loan to a new lender while progress payments are still underway. The new lender will not just look at the original approval. It will normally reassess the project as it stands today, including the current debt, how much work has been completed, what still needs to be funded, whether the build is on schedule, and what the finished property is expected to be worth.
Why borrowers refinance mid build
Common reasons a refinance is considered
- 01rate reduction
- 02cash flow relief
- 03policy or lender issue
- 04builder or scope change
- 05equity release needs
- 06loan restructuring
A new lender usually wants to see:
Updated valuation or as if complete valuation- Evidence of completed works and paid progress claims
- Remaining build budget and timeline to completion
- Current income, debts and refinancing purpose
What the new lender assesses
Typical refinance checks during construction:
-
Current loan balance and any undrawn construction funds
-
Stage of completion and remaining works still to be funded
-
Updated valuation based on current and completed value
-
Builder status, contract changes, and any cost overruns
-
Borrower serviceability under current policy settings
Refinance risk zones
-
Early stage build
Harder
-
Mid stage build
Case by case
-
Near completion
Easier
How refinance approval works
Lenders review
existing construction loan statements- progress payment history
- updated plans and building contract if varied
- remaining cost to complete
- updated valuation and inspection report
- borrower income, liabilities and living expenses
- reason for refinance and exit strategy to completion
Typical refinance pinch points
-
Valuation risk
Current value may lag cost
-
Progress draw continuity
Must not disrupt the build
-
Cost overrun exposure
Borrower may need extra funds
-
Settlement coordination
More moving parts than standard refinance
Need Help with your Project?
Common problems
Refinancing during a live build can work, but it often becomes difficult when value, policy or timing do not line up cleanly between the outgoing lender, the incoming lender, and the builder.
Valuation is too low
If the updated valuation does not support the debt plus remaining build cost, the new lender may not advance enough to take out the old facility and finish the job.
Possible solutions include:
contribute additional equity- reduce the refinance amount
- wait until a later build stage
- seek a lender suited to construction refinance
Remaining works are too complex
Some lenders are cautious if the build has major variations, delays, builder changes or incomplete documentation.
Possible solutions include:
- provide updated contracts and plans
- show a clear cost to complete
- use a broker familiar with construction policy
- consider finishing first and refinancing later
Refinance timing interrupts progress payments
A refinance that is not managed properly can slow the next draw and create pressure with the builder or suppliers.
Possible solutions include:
- plan the refinance before the next draw is due
- prepare all progress and invoice records early
- coordinate payout and new loan settlement carefully
- keep a cash buffer for short delays
